Home loans for people in negative equity

15 April 2009

Two major home loan providers are now offering mortgages to existing customers who are in negative equity.

Halifax and Bank of Scotland are extending the maximum loan-to-value (LTV) ratio on some of their mortgage deals to customers who are coming to the end of their existing fixed- or tracker-rate mortgages.

This means that some customers in negative equity are able to obtain home loans that usually require deposits of at least 5%.

Typically, homeowners in negative equity have been forced to start paying their lender`s standard variable rate (SVR) - often more expensive than other rates - at the end of their fixed-rate or tracker deals, as lenders would be reluctant to offer a remortgage on a home that is worth less than the borrowed amount.

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Tags: loans, home loans, home, mortgages, loan to value, LTV, maximum LTV, negative equity, mortgage negative equity, remortgage negative equity, Halifax, Bank of Scotland, fixed rate, variable rate, standard rate, mortgage rates, interest rates, loan rates, deposit, low deposit

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